Tuesday, February 10, 2009

Beginning by perusing the snippets that dribble into the Houston Chronicle blog from CERAweek, Representative Markey admitted there would be some role for coal in the future; while IHS looked to see the recession last through this year, bottom out next and rebound in 2011, in the process demand for oil will fall another 1 mbd this year. In the same session company assets were foreseen as dropping further below real value, according to an IHS analyst; and the imbalance between operating costs and commodity prices would continue to feed increasing supply volatility. The BP Chairman felt that with enough investment (a trillion dollars a year) enough energy will be found to meet global demand. If we can overcome the human problems, the geological problems will be insignificant. He called for a confident relationship between government and companies, since without it investment would not be forthcoming; an open energy market; a heavy investment in conservation and energy efficiency; a program to address global warming, through increasing the price paid for carbon fuels (cap and trade); opening up the reserve areas now off limits including the continental shelf; incentives to encourage CCS and low carbon technology; and more investment in energy research – he bragged about the model program he set up with Dr Chu. In questions he said that the industry must get costs in line so that $40 becomes a good price again; that corn ethanol is not an answer (but cane ethanol is); and before we decide on electric cars we have to decide where the power is coming from. The Schlumberger Chair reminded the audience that before the economic collapse we were having a hard time meeting supply, and his job is to keep a viable company until those times come back, and that includes keeping R&D going. The Director General of Pemex, said that they plan on producing 2.9 mbd this year, but needs more money for investment in new resources and a refinery. The Vice Chairman of CNPC said that China had a remarkable year and were concentrating on technology, including EOR for mature fields. In questions they saw a role for gas from shale, and a need for a better image for the industry .

The lunch speaker was the Shell CEO and he also pointed out that as the recession ends so the demand for oil will return, and fast. This will require use of all resources and will raise carbon dioxide levels. But it also will require investment, even through these hard times. They are now living on past investments, but fears that in 3-4 years the cost of insufficient investment will be hurting production. They plan on continued investment in R&D, he bragged about the unmanned offshore monotowers that produce gas. He also supported cap and trade, and many of the items listed by the BP head. In questions he said that Europe, having higher taxes was equivalent to a carbon tax, and had led to more efficient cars. In other talks, they admitted Texas was in recession with the country economy expected to continue to contract all year. And then Exxon spoke out against cap-and-trade, preferring a straight tax. Finally the IEA Chair said that they expected to revise this years demand down another notch, before starting to grow next year. But he also said that energy professionals were more optimistic than financiers at this point.

The struggle between water and energy from hydroelectric projects continues to divide Tajikistan Kyrgyzstan and Uzbekistan as the situation turns bad enough that growers are burning their orchards for fuel.

In the United Kingdom the National Grid is planning on sequestering its carbon from 5 coal-fired power plants near the Humber in rock layers under the North Sea which once held natural gas. They feel they can do this within 3 years. On the other hand Brazil’s Energia hopes to trap 1- 15% of the gas from a power plant in algae that can then generate oil. Another UK Power company Centrica has upset shareholders who would rather it invested in natural gas rather than nuclear power. And in the gas business Gazprom which is anticipating a 5% cut in Western European demand is also now expecting a 15% drop in demand from Eastern Europe. But that has no stopped them denying the rumors and pledging to move forward on development of the Shtockman field, starting next year, yielding natural gas in 2013, and LNG the following year. Gazprom is also investing in LUKoil to help it repay some loans. And speaking of LNG the anticipated shipment of LNG from Sakhalin has been postponed until April In the meantime they are making up the contracted amounts by using gas from Abu Dhabi. (Unrelated but they also have a wakening volcano – just like Alaska). Gazprom are also making another move at the UK market, this time trying to sell electrical power.

Russia is considering a tidal power plant near Murmansk. And half-way around the world similar plans are being considered for the Columbia river in the Northwest USA. Rolls Royce, meanwhile are testing turbines in the UK that can generate up to 1 MW, with a sea trial for a 0.5 MW unit scheduled for this summer , they foresee up to 300 MW of tidal power being possible around the UK by 2020.

The power crisis in Bangladesh is likely to continue until at least mid-May when the Monsoon starts, since the current drought has dropped the water levels needed for hydropower and at present they are drawing down the existing gas fields so fast that they risk damaging the rock structure, and still don’t have enough. Chittagong, a major city, now only has power for half the demand.

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Waterjetting Index

After writing about Waterjet Technology for a couple of years at this site I have created an index, hopefully this will be updated monthly and can be found at: Waterjet Index .

The Archive of Oil and Gas and Coal Posts

About ten years ago I began to write a blog, and after a time that transformed into co-founding The Oil Drum. Move on a few years, and at the end of 2008 I turned from being an editor there to this blog, although the OGPSS series continued to be posted, on Sundays, at TOD as their weekly Tech Talk. Some of the industrial technical descriptions of oilwell formation and coal mining are relatively timeless and useful, and so are listed below.

Along the way I became similarly cynical about some of the facts being bruited about Climate Change, and did a little study, which is documented here as the State Temperature Analysis Series. It showed that the UHI is real and that there is a log:normal relationship between population and temperature (which is also related to altitude and latitude). You can read the individual state studies, which are listed below. There will still be the occasional post on this topic.

Just this last year I was asked to write a weekly blog on the application of High-Pressure waterjetting – which is the subject that I specialized in for four decades.That too is now, therefore, a part of the contribution.

And, in my retirement, I have become curious about Native Americans and what they looked like.And so I am now learning Poser and related programs, and may inject both posts and the odd illustration – helped by the many real artists who work in that medium, as I read and try and comprehend what went on in the depths of The Little Ice Age (around 1600 – 1700).

Because I am a Celt, there will also be the odd post on my lineage and some of the DNA studies that relate to history.

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Units and Conversions

One of the problems in following stories in different countries is that they use different units and symbols. This can be a bit confusing, and so, where I can, I will try and standardize on the unit of barrel/day, or bd for oil. I will also use a thousand cubic ft kcf for natural gas. Prices will also be standardized, when I can, in $/kcf for natural gas, $/barrel for oil, and $/gallon for gasoline.

In larger units volumes a thousand barrels a day becomes 1 kbd and a million barrels a day becomes 1 mbd. For natural gas a million cu ft per day will be 1 mcf. (In many quotes this has appeared as 1 MMcf).

A billion cu. ft. is 1,000 mcf. Note that a cubic foot of gas produces 1,030 Btus - so to simplify 1 million Btu's is approximately 1 kcf, or 28.3 cu.m. of natural gas equivalent.

A ton of oil is 7.33 barrels. (Mainly used in Eastern Europe).

Since not all posts before this show these units - note that this change happened on March 3, 2009.